Yalla recently launched its new app, expanding its remit to facilitate Halal investments, but IFN Fintech learns that the Nigerian Islamic fintech start-up intends to procure another license to allow it to offer its own Shariah compliant investment portfolios.
How it began
What started out as an endeavor to offer Nigerian Muslims a tech-enabled avenue to save exclusively for Hajj and Umrah has evolved to become a goal-based savings and investment platform catered to meet a wider range of financial needs.
“When we launched, reality hit us. The people who had enough or could save toward Hajj and Umrah were not a lot. Many of them were young — Gen Z and millennials — who would rather save for something else,” explained Sheriff Bakare, the founder and CEO of Yalla. “So, we went back to the drawing board — how can we make Yalla more inclusive? How can we facilitate savings for bigger needs and offer opportunities to find investment options that resonate with our customers’ values?
Sheriff, who is also CEO of Muslim lifestyle digital media channel HalTV Aftrica, began working on Yalla in 2018 after completing his Umrah, during which he noticed a market gap in user-friendly platforms for Nigerian Muslims to save toward completing their religious obligation. Bootstrapping the entire operations including building the technology infrastructure from scratch in-house, the team launched the first iteration of Yalla in 2021, where it only had a Hajj and Umrah focus.
The second version was unveiled last month.
In the span of about a year between the two versions, Yalla secured a Lagos State Government Cooperative License, allowing it to invest its members’ funds and offer Ijarah contracts. It also built relationships with Securities and Exchange Commission (SEC)-regulated asset managers to access third-party regulated Islamic funds.
“Our goal moving forward is to have a microfinance license and/or an SEC license to allow us to be able to manage funds outside of regulated platforms — we’ll be able to create our own funds,” Sheriff told IFN Fintech.
Gaining additional licenses is part of a bigger ambition. Sheriff wants to build Yalla to become a global Islamic fintech company from Africa to the rest of the world.
“The vision is huge, the drive is high,” Sheriff said, adding that the company intends to deploy the same strategy in other parts of Africa in the future.
Sheriff is nonetheless realistic and is taking things one step at a time. Yalla’s immediate focus is building Islamic fintech awareness and the Yalla brand within the community. “The market is big, but how do we unlock the market? This is the first and biggest need we must sort out first,” he said.
Nigeria is Africa’s biggest economy by GDP, home to over 214 million people, more than half of whom identify as Muslims. With over 100 million Muslims in the country alone, the opportunity for Halal digital finance is tremendous. As at the 8th November 2022, there are only about eight Islamic fintech companies in Nigeria, and fewer than 10 in the rest of Africa, according to the IFN Islamic Fintech Landscape.